Chapter 5 – Zero Fee Structure - Audio Version
Securing Digital Rights for Communities (Game Theory and Governance of Scalable Blockchains for Use in Digital Network States)
Chapter 5 – Zero Fee Structure
Zero fees means the masses can use it and the complex operations can remain trustless
Introduction
Transaction fees on a blockchain can make or break its usefulness and decentralisation. Many projects overburden their Layer 1 with features that dramatically raise fees or force it to become overly complex and resource-heavy. This leads to two typical problems:
High fees that discourage on-chain activity, making the network exclusive to wealthy users that can afford the fees, especially when carrying out the large volumes of micro transactions required in social communities.
High volume and throughput fat nodes where only smaller numbers and groups of well-funded operators can run the chain’s infrastructure, reducing community self-sovereignty.
Below, we explore how to address spam, infrastructure incentives, and why a fee-less or low-fee Layer 1 model best serves a truly decentralised community when it comes to social interactions and Network States.
5.1. Spam limitation & Resource Credit Systems
A common objection to free transactions is: “Won’t it be spammed?” The answer is to require staked resources (sometimes called Resource Credits) instead of charging individual fees per transaction. This system:
5.1.1 Requiring Users (or Apps) to Stake
To transact, an account should lock up a small amount of the chain’s native token.
The larger your stake, the more daily (or hourly) Resource Credits you receive, the more free, on-chain transactions one can carry out per day.
5.1.2 Eliminates Per-Transaction Fees
Each operation (post, vote, transfer) consumes a small portion of these credits but does not charge you a fee.
Resource credits recharge at a certain daily rate, say 20% per day. meaning, if an account executes enough transactions in a particular day that the Resource Credits drop below 80%, it will take more than 24 hrs. for the account to regenerate to 100%
Once credits recharge, you can transact again at no extra cost.
5.1.3 Deters Spam
Malicious spammers must stake substantial tokens to sustain large-scale attacks, making spam expensive.
Honest users who do not overshoot transaction limits continue accessing the network without paying fees.
5.1.4 Fosters App-Level Staking
Applications can stake and delegate tokens and their associated resources in bulk so their end users can transact for free, using the resources of a larger stakeholder. The token or resource delegation happens in such a way that the delegator’s tokens are never at risk of being stolen by the account receiving the delegation. Resource delegations can be withdrawn at any time (See Chapter 7.3 “ Making Spam Costly and Creating Competition for Resources Increasing Buy Pressure with Increasing Network Affect” for further information on delegations of resources).
This further democratizes access because everyday users do not need to buy or hold tokens personally.
Apps become “holders of last resort,” maintaining large stakes to serve their communities (see more information on this matter in Chapter 12.11 “DApps and Services as Holders of Last Resort”).
This approach banks the unbanked: people in low-income regions can post, comment, or transfer value without paying fees, so long as the application or a sponsor account stakes enough to cover them.
5.2. Incentivizing Community-Run Nodes & Infrastructure
In a genuinely decentralised model, elected community members run the nodes not giant corporate data centres or venture-funded teams. To make that viable:
5.2.1 Paying Infrastructure Operators from the Protocol
The base chain’s inflation or block rewards should fund node operators directly.
This prevents infrastructure operator sole reliance on business models or venture capital.
5.2.2 Reputation & Community Voting
The community votes for reputable infrastructure operators.
Elected operators receive predictable rewards to maintain servers, store data, and confirm blocks. This does not need however, to be the full daily rewards pool, but only a portion of it. Remaining rewards can be distributed to other types of value creators and infrastructure operators in the ecosystem.
If they fail or behave maliciously, they lose votes, and therefore rewards.
5.2.3 Freedom to be Anonymous
Operators can receive block rewards from the chain without revealing their identities.
This protects them from external pressure, enabling truly neutral infrastructure which creates the foundation for protection of Digital Rights for all users.
Combining fee-less end-user transactions with direct infrastructure rewards ensures the network remains inclusive while node operators have the incentive to keep running services that benefit everyone.
5.3. Why High-Fee Layers are Bad for Communities
Many blockchains impose high fees especially if they:
Store everything on one layer (heavy code, complex smart contracts, large data).
Have limited throughput that forces bidding wars for transaction space.
5.3.1 High fees cause:
Exclusion: Everyday users, especially in low-income areas, can’t afford consistent on-chain activity.
Stunted Growth: Apps cannot embed frequent transactions or user-generated data if each operation is expensive.
Centralisation: Only wealthy entities can transact heavily or run specialized infrastructure.
When base-layer fees become high, communities cannot harness the blockchain for everyday speech, social features, or micro-transactions. Instead, usage reverts to speculative DeFi and whales who can afford to pay high fees, undermining the vision of broad, censorship-resistant participation for the widest possible user base.
High fee layers also mean that Layer 2 systems cannot clear to the Layer 1 security layer very frequently due to having to constantly pay Layer 1 fees in order to do so. The result is that one has to trust Layer 2 with information until it clears to the finality layer (L1).
On a fee-less blockchain, this is not an issue since one can always afford to clear to Layer 1 as long as it has enough stake in the eco-system to control the resource credits necessary to clear to Layer 1 on a continuous basis proportional to its usage.
5.4. Why a Low-Fee or Fee-less Layer 1 is Preferred
A fee-less or near-zero-fee system on Layer 1 is crucial for:
5.4.1 Universal Access
Anyone can create content, transfer funds, or engage in governance without cost barriers.
This ensures that economic class does not dictate who can speak on-chain.
5.4.2 Circular Economies
When transactions are free at the user level, the network can become a platform for day-to-day exchanges.
Enables sending small tips, micropayments, or publishing social posts.
Fosters a vibrant on-chain community rather than a speculative clique.
5.4.3 Strong HODL Incentives for Decentralised Applications
Applications stake tokens to cover user interactions.
They must keep those tokens staked long-term to serve their audience.
This effectively locks supply out of circulation, providing floor demand and lending intrinsic value to the token.
This means that the majority of Dapps (decentralised applications) wont sell their stake at any price, since if they did, their Dapps would stop being able to post to chain through lack of resource credits. This means Dapps are holders of last resort and thus create an intrinsic value and floor price to the token providing resource credit staking in the eco-system (see more information on this matter in Chapter 12.11 “DApps and Services as Holders of Last Resort”).
5.4.4 Equitable Distribution for Everyday Users
Fee-less usage makes it far easier to distribute tokens to everyday participants.
Example: Rewarding posted content or community contributions / real world, document-able actions in a low-cost environment.
Conclusion
Fee policies shape who can use your chain and how. If you want mass adoption, true censorship resistance, and a community-run architecture for social based Network State systems, you must ensure:
Staked Resource Credits instead of per-transaction fees.
On-chain incentives for node operators, allowing them to remain independent.
lightweight (mostly text-based) Layer 1 so many people can run it without specialized hardware.
Simplicity that keeps the system forkable and avoids centralisation by complexity.
With a fee-less or near-zero-fee model, you empower a global user base far beyond crypto speculators to store text, engage in social communities, and exchange value via cheap or zero-fee utility systems, not speculation alone. The chain’s neutral funding of infrastructure ensures longevity and true decentralisation, preventing regulatable corporate takeover or excessive corporate influence, leaving the community to be governed and regulated by itself.
This is the bedrock for building scalable, censorship-resistant Network States where anyone can join and freely transact without gatekeepers.
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